AUD/USD continues to lose ground this week. Currently, the pair is trading at 0.6911, up 0.62% on the day. On the release front, there are no data releases out of the U.S. or Australia. Later on Monday, the RBA releases the minutes of the policy meeting earlier this month. On Tuesday, the U.S. posts existing home sales.
Australian employment numbers were mixed last week. The economy created 28.4 thousand jobs in April, marking a 3-month high and crushing the estimate of 15.2 thousand. However, the unemployment rate climbed to 5.2%, higher than the estimate of 5.0%. This is the highest level since August. Meanwhile, wage growth has remained fairly steady. Wage price index remained pegged at 0.5% for a second straight quarter. The key indicator has posted gains of 0.5% or 0.6% since the last quarter of 2016.
The Australian general election was a shocker, as Prime Minister Scott Morrison’s conservatives had been widely expected to lose to the center-left Liberals. Morrison had trailed badly in the polls throughout the campaign, but came from behind in stunning fashion to pull off the victory. The markets reacted favorably to the election results, and AUD/USD climbed as high as 1.0% on Monday. The pair is coming off a dismal week, falling 1.9%. This marked its sharpest decline since early February.
Federal Reserve Chair Jerome Powell will speak at an event on Monday, and there are a dozen Fed speakers at various venues during the week. Still, investors don’t expect to hear anything new from the Fed, which has said that the next rate move could be in either direction. The markets have priced in a rate cut later this year, and some analysts are predicting a second rate cut before 2020. This could take dampen enthusiasm for the strong U.S. dollar, as rate cuts would make the greenback less appealing to investors.
